Sunak extends Covid bailouts for No Deal
RISHI SUNAK is preparing to widen the use of his coronavirus bailout schemes to help firms if there is a No Deal Brexit.
The Chancellor will invite companies hit by disruption to take advantage of government-backed loans and the furlough scheme.
The support measures were put in place to provide relief for businesses struggling because of the pandemic.
But now the Treasury plans to give them a dual purpose by using them to help firms get through short-term difficulties caused if the country leaves the EU without a trade deal.
For example, a business that suddenly lost export orders because of new tariffs or had production disrupted because of supply issues could receive a government-backed loan to tide them over.
Ministers are also looking at the possibility of multi-billion-pound bailouts for industries hardest hit in the longer term by a No Deal Brexit, such as sheep farmers and car manufacturers.
Under World Trade Organisation terms, the average tariff for lamb would be 48 per cent, raising concerns that exports would stop entirely.
This would leave Britain with too much lamb, drive down prices and make sheep farming non-viable.
The Department for Environment, Food and Rural Affairs may have to step in to buy tons of unsold lamb at the point of slaughter.
Cars would face a tariff of 10 per cent. Nissan has warned that the UK’s biggest car factory will not be sustainable if a Brexit trade deal is not agreed.
The Japanese firm, which employs 7,000 staff at its plant in Sunderland, said additional costs from tariffs and possible border delays would threaten its viability.
About four-fifths of the vehicles it makes are shipped abroad and new costs would make the cars less competitive.
Tory former Cabinet minister Dr Liam Fox will today urge the Government to prioritise small businesses as the country deals with the consequences of Brexit and coronavirus. He will call on Boris Johnson to ensure the Conservatives are their ‘champions’, because these companies are ‘ the lifeblood of the economy’.
The former secretary of state for international trade will also propose the introduction of a ‘small business test’ in the next budget whereby every piece of legislation, regulation and taxation would be vetted as to its impact on companies prior to being enforced.
In a speech in Sunderland, Dr Fox will say: ‘I think we need to think about the post-Covid recovery and think, post-Brexit, what kind of economy we want to have, with or without a deal.
‘I believe that stuffing the public sector with even more money is not the answer. This must be a private sector-led recovery but more explicitly a Small Business Recovery.’ The UK’s departure from the EU offers the country an ‘opportunity to re-shape our economy’, Dr Fox will suggest.
He will add: ‘We must put at the centre of our thinking the role of our SMEs. It is key for our economy and it is key for the Conservative Party. Just as we were the party of ownership of property and shares in the 1980s, with council house sales as our flagship policy, now we must be the party of small business.’
The former UK nominee for director- general of the World Trade Organisation is al so expected to promote the introduction of a ‘small business test’, which would look at every piece of legislation and ask ‘is what we are doing good for those small business people across all our country?’ Dr Fox will say: ‘I would like to know how everything we do is perceived by every small business in Britain.
‘I would like every bit of legislat i on, every r egulation and every bit of taxation to pass the entrepreneur test, the small business test. I would like to see the Chancellor build it into his next budget.’